Investors buy into F1 for $1.6bn as Bernie Ecclestone confirms float

Bernie Ecclestone has confirmed that Formula 1 will be listed on the Singapore
stock exchange by the end of next month.

Mr Ecclestone will not reduce his 5.3pc stake in the IPO. The 81 year-old will remain F1's chief executive and he says that no successor is being groomed.Photo: AP/EPA

By Christian Sylt

6:45PM BST 22 May 2012

"All the things that have to happen have happened. It will be finished by the end of June," he said.

His comments follow the sale of 21.3pc of the business to three investment funds for $1.6bn (£1.01bn), valuing F1 at $9.1bn including debt.

In January, US investment fund Waddell & Reed paid $1bn for a 13.9pc stake in F1's Jersey-based holding company Delta Topco. It was followed by US money manager BlackRock and Norges, the investment division of Norway's central bank, which together paid $600m to get a combined stake of 7.4pc earlier this month.

"It is super to have them on board," says Mr Ecclestone adding that it "shows how seriously Formula 1 is treated in the financial world. These people joining is a sort of stamp of good housekeeping. It's a great way to start the IPO and lets investors know what they can expect."

Goldman Sachs, UBS and Morgan Stanley are the joint lead book-runners on the F1 flotation. UBS is understood to have got the funds on board. By buying into the business before IPO, the funds are expected to get an uplift of between 10pc and 30pc as, on listing, F1 is expected to have a market capitalisation of $10bn to $12bn.

The funds' shares, which do not carry voting rights, were sold by private equity firm CVC Capital Partners, reducing its stake to 42.5pc. Through the $1.6bn sale to the new investors, CVC will have recouped much of the $1.7bn it spent buying F1 in 2006. CVC will sell a further 11pc in the IPO.

"I look at the float as a change of shareholders," said Mr Ecclestone, adding: "We've got some shareholders at the moment, so now they are going to sell some of their shares and we are going to have some other shareholders. I don't imagine the shareholders will be running the company so there's no real change. It's not going to bring any investment to the company as it doesn't need it."

Around 30pc of F1 will be listed with the bulk of the equity coming from the estate of bankrupt bank Lehman Brothers, which is F1's second-biggest shareholder with 15.3pc of the business.

Mr Ecclestone will not reduce his 5.3pc stake in the IPO. The 81 year-old will remain F1's chief executive and he says that no successor is being groomed.

"I wouldn't appoint somebody to do my job because nobody would run the business the way I do. You might as well have asked Frank Sinatra who he would appoint to replace him. Somebody can sing but can they sing like Sinatra? No. Will somebody run the business the way I run it? No. They might run it better but they wouldn't run it the same."